Mauritius Fuel Prices Keep Rising — Here's Why the Buffer Fund Is Broke

Every time fuel prices rise in Mauritius, many drivers simply absorb the hit and move on. Few realise there is a financial mechanism specifically designed to cushion those blows — and right now, that mechanism is failing. **What is the Price Stabilisation Account?** The Price Stabilisation Account (PSA) is a buffer fund managed as part of Mauritius's fuel pricing system. The idea is straightforward: when global oil prices fall, a portion of the savings is set aside in the PSA instead of being passed on in full to consumers. When oil prices spike, the fund draws on those reserves to absorb part of the increase — meaning the pump price rises less sharply than it otherwise would. In theory, it acts as a shock absorber, protecting Mauritian motorists and businesses from the full volatility of international energy markets. **The problem: the account is deep in the red** According to the latest communiqué from the Petroleum Pricing Committee (PPC) — the body that reviews and sets fuel prices in Mauritius — the PSA deficit stood at **Rs 3.63 billion** as of 28 September. That is up from Rs 3.5 billion recorded at the committee's previous meeting on 14 August. In just six weeks, the shortfall widened by approximately Rs 130 million. A fund that is supposed to accumulate reserves is instead running a growing deficit. That reversal is significant: rather than smoothing price increases, the PSA is now one of the reasons prices keep going up. When the account is in deficit, there is no cushion to draw on — any upward movement in global oil costs is more likely to be passed directly to the consumer at the pump. **Why is the account in deficit?** The PSA struggles when oil prices remain elevated for extended periods, as they have been in recent years. During sustained high-price environments, the fund pays out more than it takes in, gradually depleting reserves and ultimately moving into the red. Recovery requires a prolonged period of lower global prices — something that has not materialised consistently enough to repair the balance. **What this means for Mauritians** For everyday consumers — motorists, taxi operators, bus companies, and businesses that depend on transport — a depleted PSA means less protection against future price hikes. If global oil prices rise again, there is effectively no financial buffer standing between international markets and the Mauritian pump. The succession of fuel price increases Mauritius has experienced is not simply a reflection of what is happening on global markets. It is also a consequence of a domestic stabilisation tool that is no longer performing its intended function. Until the PSA is restored to a positive balance, Mauritian consumers should expect that global oil price movements — up or down — will be felt more directly and more quickly at the forecourt. Source: ION News